2004 (5) TMI 488 - AT - Central Excise

Summary

Issues:
- Interpretation of Rule 57CC of the Central Excise Rules regarding payment of 8% on goods cleared without duty payment.
- Liability of manufacturer under Modvat Scheme for payment of duty on goods manufactured from inputs without credit availed.

Analysis:
The appeal before the Appellate Tribunal CESTAT, New Delhi involved a dispute regarding the interpretation and application of Rule 57CC of the Central Excise Rules. The appellants, engaged in manufacturing excisable and exempted goods under the Modvat Scheme, had cleared Rectified Spirit without paying Central Excise duty. The issue revolved around whether the appellants were liable to pay 8% of the value of goods cleared without duty payment, as mandated by Rule 57CC. The appellants argued that they should not pay 8% for goods manufactured from inputs without credit availed. However, the Revenue contended that under the Rule, manufacturers must pay 8% for goods cleared under exemption or nil rate of duty, irrespective of credit availed on inputs.

The Tribunal analyzed the provisions of Rule 57CC in the context of the appellants' case. It noted that the appellants, operating under the Modvat Scheme, had indeed cleared goods without duty payment and were availing credit for their final products. The Tribunal concluded that as per the Rule, manufacturers in such situations are obligated to pay 8% of the value of goods cleared without duty payment. The Tribunal dismissed the appeal, stating that the appellants were liable to pay 8% for the Rectified Spirit cleared without duty payment in June 1997, as per the provisions of Rule 57CC.

In summary, the judgment clarified the requirement for manufacturers working under the Modvat Scheme to pay 8% of the value of goods cleared without duty payment, even for products manufactured from inputs without credit availed. The decision emphasized the strict application of Rule 57CC in determining the duty liability of manufacturers in cases involving the clearance of goods without payment of Central Excise duty.